Colleges are using AI to determine financial aid packages, attract diverse students
Schools are increasingly partnering with vendors to use enrollment algorithms like 'financial aid optimization' to develop financial aid offers for potential students.
Despite the apparent usefulness of AI, Alex Engler of the Brookings Institution fears that such software can perpetuate discrimination in higher education.
Artificial intelligence is not only changing education by altering how teachers deliver information and how students learn, but such advanced software is also being employed to provide financial aid.
According to an Higher Ed Dive piece published on Sept. 5, colleges are starting to use AI to determine financial aid packages for prospective students. Schools are partnering with firms like EAB to help their admissions teams through the use of “enrollment algorithms,” which “predict the likelihood that a student will enroll in an institution after being offered admission.”
EAB helps colleges in deploying data analytics and in using an enrollment algorithm process known as “financial aid optimization” (FAO) in order to attract a diverse student body.
“When supported by rigorous modeling and data analysis, FAO is one of the most powerful tools colleges and universities have at their disposal to diversify enrollments and generate the revenue they need to operate,” EAB states.
“EAB works with each school to develop a strategy framework that helps them understand every factor used to determine the amount of suggested aid that might be offered to each student,” the firm explains. “We also model for them all estimated outcomes, including total enrollment and net tuition revenue, as well as predicted performance against equally important diversity metrics, academic profile, financial needs, and other characteristics each institution deems important.”
Wes Butterfield, Senior Vice President of Ruffalo Noel Levitz (RNL), told Campus Reform that his educational consulting firm builds models helping colleges better understand the reasons a potential student may decide to enroll. After the student does enroll at the school, RNL works with the college on the risk factors.
“We’re changing the dependent variable from enrolled to retained (or it could be graduation),” he said. “From there we can work with a campus to develop a safety net to strengthen persistence and graduation rates.”
Although there appear to be advantages for using AI in developing financial aid, not everyone supports its usage.
Alex Engler, a fellow at the left-wing Brooks Institution, told Higher Ed Dive that the software has the potential to display bias against certain groups and thereby create unequal outcomes.
In September 2021, he authored a report on how algorithms can contribute to discrimination in higher education.
“Like many other algorithmic applications, such as algorithmic hiring or facial analysis, enrollment algorithms are susceptible to the possibility of biased outcomes—such as against racial minorities, women, people with disabilities, or other protected groups,” he writes.
Campus Reform contacted all individuals mentioned for comment. This article will be updated accordingly.